My dad sold some property and took back a mortgage. Dad is using the installment method.
Dad is 99, so I'll end up inheriting the mortgage. When I do, what will be the basis?
He sold the property for $350,000, and the profit percentage is 98%. So he has capital gains on the profits.
Will I inherit at $350,000 basis or his basis of $7000? :confused:

The basis of property STEPS UP to the Fair Market Value of the property at the date of the decendent's death.

I see no reason why the same principal would not apply to the installment note.